Nixon Colluded with Milk Producers to Increase the Price of Milk
The Associated Milk Producers Inc, was a consortium of milk producers who wanted an increase in milk subsidies, artificially increasing the cost of milk to the consumer. In 1971 Nixon met with the AMPI and negotiated a deal through which the milk subsidies would be increased by $100 million dollars, in return for a $2 million dollar campaign contribution, broken up and routed to the campaign coffers through the creation of several political action committees or individual donors. Nixon met with officials of the AMPI personally, and the agreement was negotiated for the most part by John Ehrlichman.
Former Nixon aide Murray Chotiner left the White House in 1971 to return to the practice of law. He was retained by the AMPI to improve the group’s access to the White House, since Chotiner had an over twenty-year association with the President. Before the donations for subsidies the AMPI twice delivered cash to Herbert Kalmbach, the President’s longtime friend and private attorney, as contributions to Operation Townhouse. The lobbying through the use of illegal donations and personal relationships got the AMPI access to the President in March, 1971.
During the meeting in the White House the President warned the AMPI representatives not to discuss donations while he was in the room. Nixon tried to make small talk with the AMPI representatives, suggesting that they market milk as a mild sedative, a safe alternative to a sleeping pill. When the AMPI representatives tried to return to the subject of the money Nixon responded, “Don’t say that while I’m sitting here. Matter of fact, the room’s not tapped. Forgot to do that.” When the meeting was over Nixon’s aides, led by Ehrlichman, finalized the deal. Ehrlichman suggested they celebrate with a glass of milk, while it was still relatively cheap.
After the meeting, Harold Nelson, president of the AMPI, and Chotiner transferred the $2 million to Kalmbach. When the deal was exposed Nelson was convicted and went to jail, as did another AMPI official, David Parr. Nixon was not prosecuted for his involvement in the affair as the pardon he received from his successor, Gerald Ford, covered all of his high crimes and misdemeanors. The $100 million to the AMPI was absorbed by milk consumers and the taxpayers. AMPI as a corporate entity was found guilty of violating campaign donation laws and fined $35,000, equivalent to about $145,000 in 2018.